Friday, September 17, 2021

Ex-WorldCom CEO Ebbers begins jail term today

Former WorldCom Inc. chief executive Bernard Ebbers is scheduled to report to a federal prison today to begin a 25-year sentence related to his role in the accounting misstatements that led to the telecommunications giant’s bankruptcy.

Ebbers was convicted in March 2005 of one count of conspiracy to commit securities fraud, one count of securities fraud and seven counts of false filing with the U.S. Securities and Exchange Commission (SEC). In July, an appeals court upheld his conviction and sentence.

Ebbers has been ordered to report to prison by 2 p.m. EST Tuesday, according to the U.S. Attorney’s Office for the Southern District of New York. An inmate’s federal prison assignment is not public information until after he’s jailed, said a spokeswoman for the U.S. Department of Justice’s Bureau of Prisons.

The indictment against Ebbers charged that in 2000 he took part in a scheme to falsely inflate revenue and the price of WorldCom’s stock. Ebbers said he didn’t know of the financial irregularities.

WorldCom, which later changed its name to MCI Inc., filed for bankruptcy in July 2002 after disclosing that employees falsified records to inflate revenue. In April 2004, MCI agreed to a $750 million settlement for accounting irregularities with the SEC.

Verizon Communications Inc. purchased MCI in a deal worth $8.5 billion in cash and stock that closed in January.

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Jim Love, Chief Content Officer, IT World Canada

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